Every business organization deals with vendors who provide a variety of different services. As much as companies depend on vendors, it is also vital for them to evaluate any potential or substantial risks that come with a vendor relationship. When doing business with vendors, businesses need to ensure that the organizations they partner with don’t create any negative influence on reputation or performance. Vendor Risk Management (VRM) plays a vital role and ServiceNow enables robust vendor management for businesses.
What is ServiceNow Vendor Risk Management?
ServiceNow’s Vendor Risk Management (VRM) helps businesses assess and manage risks that are associated with vendor relationships across various operations that take place in an organization. Used in the Governance, Risk, and Compliance module, the objective of Vendor Risk Management is to provide a robust, centralized process that assesses vendor-related risks and manages portfolios of different vendors.
VRM also reduces the manual burden with assessment automation. Not to be confused with ServiceNow Vendor Performance Management, VRM has an assessment form that gathers all information and risks associated with vendors. Once the form and questionnaires are completed, VRM manages all issues and information about vendors.
Vendor Risk Management States
To assess vendors, there are the Vendor Assessment States in the ServiceNow application, and they serve specific purposes that help display progress.
- Draft – When an assessment is created, it’s in a draft state. This is where all the information is defined and stored.
- Submitted to Vendor – When the assessment has been sent to the vendors and the business is waiting on a response.
- Responses Received – When the internal vendor risk team will review and analyze vendor responses.
- Generating Observations – When automated issue creation is triggered for the vendor's response.
- Finalizing the Vendor – Final state where the assessment is reviewed by the vendor risk team internally and externally by the vendor.
- Closed – When the assessment request is complete.
Who Can Use ServiceNow’s Vendor Risk Management?
In a business, the following positions can utilize the Vendor Risk Management application.
- Vendor Risk Manager
- Risk Analysts
- Information Security
- HR Operations
- Information Technology
Benefits of Vendor Risk Management
Vendor Risk Management has plenty of benefits that play an important role in the growth of the overall organization. Here are the benefits of ServiceNow’s VRM.
1. Improved Visibility
With the help of the entire assessment states, it becomes easy to view the status of assessments, issues, and other progress within the vendor management process.
2. Better Decision-Making
With the help of VRM, organizations can make decisions on vendor selection. It also helps identify potential risks with the help of assessments and continuous monitoring.
3. Increased Efficiency
Maintain consistent workflows across third-party vendor applications and improve collaboration and automation.
Features of ServiceNow Vendor Risk Management
ServiceNow’s Vendor Risk Management application comes with plenty of features that help organizations manage vendors and vendor risk.
- Tiering Management – Classifies third-party applications to establish the frequency of assessments and variety of questions.
- Framework Monitoring – Rank and rates content providers and use this information to enhance risk assessment.
- Assessment Management – Uses online assessments to provide faster, higher-quality responses.
- Supplier Portal – Allows businesses to connect and collaborate with vendors for all transactions in a single location.
- Portfolio Management - Replaces spreadsheets with a single database containing third-party product information and a self-service portal.
- Issues and Remediation - Automates issue generation, remediation plans, and chats in real time.
- Third-party Hierarchies - Defines parent-child relationships to properly represent and evaluate subsidiaries.
- Aggregated Risk Scores - Calculates risk scores across the hierarchy for a current, top-down, and bottom-up view of risk.
- Risk Areas – Evaluated vendors based on risk factors such as bankruptcy, delivery, and security.
- Integration with Vendor Manager Workspace – Manages third-party performance and risk in a single location.